Tariffs as Statecraft: What Trump's Trade Offensive Is Doing to America's Alliances
by Leon Hadar
President Trump's tariff campaign has entered a new, more entrenched phase this summer. On July 24, the U.S. imposed fresh 10–12.5% duties on 60 trading partners, including allies like Canada, the UK, and India, after temporary 10% tariffs put in place earlier this year expired.
The move follows a chaotic year and a half in which the administration's original "Liberation Day" tariffs were struck down by the Supreme Court in February on the grounds that emergency powers law (IEEPA) doesn't authorize sweeping, unilateral tariffs, a ruling Trump has largely worked around by pivoting to other legal tools, including Section 232 national-security investigations and Section 301 unfair-trade-practice probes.
What's notable in this latest round isn't just the rates, but the framing: officials are now justifying tariffs partly on labor and human-rights grounds (preventing imports tied to forced labor), a rationale that gives the policy more durability against legal challenge than the emergency-powers approach did.
The administration has also let the USMCA, the free-trade pact Trump himself renegotiated in his first term, lapse into a 10-year wind-down after failing to reach a renewal deal with Canada and Mexico, while simultaneously hitting Canada with a 50% tariff hike on a range of goods and threatening steeper measures if Ottawa coordinates retaliation with the EU.
The case for the strategy
Supporters argue this is tariffs used as leverage, not an end in itself, a continuation of the "Art of the Deal" theory that pressure produces better terms. There's some evidence for this: the EU implemented a negotiated deal in July that lowered its tariff exposure to 15% in exchange for opening its market to more U.S. industrial and agricultural goods, and the European Commission gave this week's new tariffs a "guarded welcome," noting the outcome tracked what had already been agreed.
Backers also point to leverage gained in reshaping supply chains, the administration's new incentive program lets companies get reduced aluminum tariffs in exchange for U.S. smelter investment, as evidence tariffs can be paired with industrial policy rather than just used punitively. And proponents argue that after decades of allies running trade surpluses with the U.S. under looser terms, some friction is a reasonable price for renegotiating those arrangements.
The case against
Critics counter that treating tariffs as a universal cudgel, applied to adversaries and allies alike, is corroding relationships built over generations for uncertain gain. Canada and the U.S. have been treaty allies for more than a century; trade economists note Canada's economy is far smaller and more dependent on U.S. trade, which gives Washington leverage, but also argue that leverage is being spent in ways that push a reliable partner toward hedging elsewhere.
That hedging is already visible: Canada struck a "strategic partnership" with China this year that eases tariffs and opens Canadian roads to Chinese TVs, the kind of realignment that trade hawks in Washington have spent years trying to prevent. European officials have made similar noises about diversifying trade relationships, and some analysts argue that a US perceived as an unpredictable partner strengthens China's hand as an alternative, more stable counterparty, even for countries that don't share Beijing's politics.
There's also a legal-durability critique: tariffs that were struck down once and are now being reconstituted through different statutory authorities look, to skeptics, less like a coherent trade strategy than an attempt to preserve maximum executive discretion regardless of the legal vehicle. And economists across the spectrum broadly agree tariffs function partly as a tax passed through to domestic consumers and importers, a cost allies can point to when arguing that the U.S. is imposing pain on both sides of the relationship.
The harder-to-resolve disagreement
Underneath the immediate disputes is a genuine disagreement about what tariffs are for. If the goal is narrow and transactional, extract specific concessions, protect specific industries like autos, aluminum, or pharmaceuticals, the EU deal and the aluminum-investment program are plausible partial successes. If the goal is a broader reordering of U.S. trade relationships to reduce reliance on any single country or bloc, then alienating Canada and straining relations with the EU and UK simultaneously cuts against that aim, since it narrows rather than widens the coalition of partners available to counterbalance China.
Both readings are defensible from the public record, and the administration itself has offered both justifications at different points, sometimes emphasizing reciprocity and fairness, sometimes national security, sometimes leverage over unrelated policy disputes like digital taxes. That ambiguity is itself part of what allied governments cite as the source of friction: it's difficult to negotiate a stable long-term arrangement with a policy whose stated purpose keeps shifting.
What happens next likely hinges on a few concrete tests: whether the August 19 Canadian tariffs take effect as scheduled or get negotiated down, whether the EU's "guarded welcome" of Friday's tariffs holds through the September USTR hearings, and whether other U.S. allies follow Canada in visibly diversifying toward China. Each would be a reasonably clear signal of whether the pressure campaign is producing deals or driving erosion.